Wheatland Realty Agent Nicole Tudisco explains 3 reasons why the housing market should thrive in 2014.
HousingWire asked David Berson, chief economist at Nationwide, for his opinion of near-term future housing. Here are the 3 things he said you need to know about 2014 housing. I have quoted the highlights of each topic for a quicker snapshot. (For the full article please click on the link above.)
No. 1: 2014 should prove to be the strongest year for housing activity since before the Great Recession.
“Most economists expect an improved job market in 2014, with employment growth accelerating and the unemployment rate continuing to decline. That jobless rate drop will reflect more of a pickup in employment than further declines in the labor force participation rate. This will be the key factor improving housing demand this year, even if mortgage rates rise and affordability declines. While the housing market tends to do especially well when the job market improves and mortgage rates decline simultaneously, that combination of events occurs only rarely. More often, either job gains accelerate while mortgage rates rise, or job gains decline while mortgage rates drop.”
No. 2: Demographics should start to favor housing activity.
“If the economy expands at a faster pace this year, bringing a more rapid rate of job creation, that should translate into more households, raising housing demand. We won’t see all three million missing households return to the housing market at once. (That wouldn’t be a good thing for the housing market anyway, since that would be on top of the 1.2 million households that normally would develop this year; such a surge would swamp the existing housing supply). Beginning in 2014, the pace of household formations should accelerate to an above-trend pace for several years, pushing up housing demand.”
No. 3: Mortgage availability shouldn’t worsen and may improve.
“Mortgage credit isn’t nearly as easy to get as it was during the housing boom, and it shouldn’t be. Still, compared with recent years, mortgage availability has increased slightly. And reasons exist for mortgage availability to be no worse in 2014 than in the past few years. Actually, it may be somewhat easier to get a mortgage loan.
Additionally, the rise in mortgage rates already has reduced mortgage origination volumes as refinance activity declines. If mortgage rates rise further this year, as expected, then refinance activity will fall still more. In response, mortgage lenders probably will ease lending standards to the extent possible under the QM rules to boost lending activity by increasing purchase originations. As a result, the increase in new households expected to be created this year, spurred by a stronger job market, should find that qualifying for a mortgage loan will be somewhat easier in 2014 than in prior years.”
Here in the Midwest, Spring weather certainly hasn’t arrived yet! However, I think there will be a big surge in the upcoming weeks as everyone breaks free of their winter bondage. If you are one of those ready to break free take a peek at our previous tips on what you need to do before you put your home on the market.
Nicole and Tony, Realtors